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02/03/2021 04:50pm

Credit to MSMEs entered into green zone in Nov; up by 5 per cent

image Credit to MSMEs entered into green zone in Nov; up by 5 per cent

New Delhi, Mar 2 (KNN) The overall credit to Micro, Small and Medium Enterprises (MSMEs) in November 2020 accelerated to 5.0 per cent as compared to a contraction of 0.6 per cent a year ago, said a bulletin by Reserve Bank of India (RBI).

As per the RBI data, MSME sector accounted for a share of around 18 per cent in the total credit to the industry and around 5 per cent in the total non-food credit extended by the scheduled commercial banks in November 2020.

Credit growth to MSMEs, which has generally remained subdued in recent years, received a further setback due to the pandemic.

“However, there has been a turnaround in credit to this sector in recent months mainly due to a sharp increase in credit extended to the medium industries. Owing to the sharp increase in credit growth to medium industries, the overall credit to MSMEs in November 2020 accelerated to 5.0 per cent as compared to a contraction of 0.6 per cent a year ago,” the bulletin added.

The bulletin also said that medium industry’s credit deployed in December was Rs 1.23 lakh crore, up 15.3 per cent from Rs 1.07 lakh crore in December 2019. Emergency Credit Line Guarantee Scheme (ECLGS) and the subordinate debt scheme were the key post-Covid credit measures taken by the government to support pandemic-hit small businesses.

As per the RBI bulletin, December also saw continued growth in credit deployment to MSEs in the manufacturing sector from October and November after being in red from April till September in the financial year. The outstanding as of December 18, 2020, for manufacturing MSEs was Rs 3.69 lakh crore, up 1.2 per cent from Rs 3.65 lakh crore as of December 20, 2019. The November and October YoY growth stood at 0.5 per cent and 0.7 per cent respectively.

''The growth had remained contracted by minus 2.2 per cent, minus 3.4 per cent, minus 3.7 per cent, minus 1.9 per cent, minus 1.2 per cent, and minus 0.1 per cent during April, May, June, July, August, and September, respectively,'' it added.

Credit growth for MSEs in the services sector also remained positive in December. From 10.2 per cent YoY growth in September, 10 per cent in October, and 9.1 per cent in November, services MSEs saw deployment up by 9.4 per cent in December 2020 worth Rs 7.61 lakh crore vis-à-vis Rs 6.96 lakh crore in December 2019, it said.

However, the growth in FY21 till December remained contracted at minus 0.7 per cent from Rs 7.67 lakh crore in March 2020.

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